E-mini: Will It Test 4,000 Today?

The E-mini formed a bull bar that closed near its high yesterday, and this is within a strong 8-day rally (E-mini triggered High 1 buy signal). The bulls want the E-mini to break strongly above 4,000 this week.

With yesterday closing near its high yesterday, today will probably trade at least a little higher. It might even gap up, and It should test 4,000 today or tomorrow.

The bears hope that today sells off. That would create a micro double top with Thursday’s high and a double top with the Feb. 16 high. However, today they would need the E-mini to close on its low to attract sellers tomorrow, given how strong the 8-day rally has been. Traders expect higher prices.

It is important to note that there is an FOMC announcement 11 am PST tomorrow. Financial markets often get neutral and quiet ahead of the report. That slightly reduces the chance of a big trend day today.

h2 Overnight E-mini Globex Trading/h2

The E-mini is up 4 points in the Globex session. It might gap up today. If it does, the gap will probably be small. Small gaps typically close in the first hour.

Yesterday had a climactic rally into the close. While that is a sign of strong bulls, it typically will attract some profit taking. There is a 75% chance of at least a couple hours of sideways to down trading, that begins by the end of the 2nd hour today.

Also, the day after an extreme buy climax day only has a 25% chance of being another strong bull trend day. If today is a bull trend day, it will more likely be a weaker type, like a bull channel of a Trending Trading Range Day.

That big rally at the end of the day was a breakout. A move like that typically leads to a measured move up or down within a few days. Up is more likely. However, 20% of the time, it is a bull trap, and immediately reverses down. In this case, it was yesterday’s second leg up. If it were to reverse down on the open, the rally would be a 2nd Leg Bull Trap.

h2 Yesterday’s Setups/h2

Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).

My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter.

If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro E-mini.

Written By: Al Brooks